Effective provisions of Companies (Amendment) Act, 2017

Effective provisions of Companies (Amendment) Act, 2017

w.e.f. 09^th Feb, 2018

PART-1

Sr. No	Section	Companies Act, 2013	Companies (Amendment) Act, 2017
1	Section 2(28)	“cost accountant” means a cost accountant as defined in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959);	Change in Definition of Cost Accountant "Cost Accountant" means a cost accountant as defined in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959 and who holds a valid certificate of practice under sub-section (1) of section 6 of that Act;
2	Section 2(30)	“debenture” includes debenture stock, bonds or any other instrument of a company evidencing a debt, whether constituting a charge on the assets of the company or not;	Definition of Debenture excluded the following. (a)   the instruments referred to in Chapter III-D of the Reserve Bank of India Act, 1934; and (b)   such other instrument, as may be prescribed by the Central Government in consultation with the Reserve Bank of India, issued by a company,
3	Section 2(41)	“financial year”, in relation to any company or body corporate, means the period ending on the 31st day of March every year, and where it has been incorporated on or after the 1st day of January of a year, the period ending on the 31st day of March of the following year, in respect whereof financial statement of the company or body corporate is made up: Provided that on an application made by a company or body corporate, which is a holding company or a subsidiary of a company incorporated outside India and is required to follow a different financial year for consolidation of its accounts outside India, the Tribunal may, if it is satisfied, allow any period as its financial year, whether or not that period is a year.	in the first proviso, after the word "subsidiary", the words "or associate company" shall be inserted Effect: Associate company of a company incorporated outside India can also apply to Tribunal for a different financial year.
4	Section 2(46)	“Holding company”, in relation to one or more other companies, means a company of which such companies are subsidiary companies.	For the definition of Holding Company the expression company will include any body corporate.
5	Section 2(49)		The term definition of Independent Director has been deleted.
6	Section 2(51)	“key managerial personnel”, in relation to a company, means— (i) the Chief Executive Officer or the managing director or the manager; (ii) the Company Secretary; (iii) the whole-time director; (iv) the Chief Financial Officer; and (v) Such other officer as may be prescribed.	For definition of Key Managerial Personnel such other officer, not more than one level below the directors who is in whole-time employment, designated as key managerial personnel by the Board has been included.
7	Section 2(57)	“net worth” means the aggregate value of the paid-up share capital and all reserves created out of the profits and securities premium account, after deducting the aggregate value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written off, as per the audited balance sheet, but does not include reserves created out of revaluation of assets, write-back of depreciation and amalgamation;	Now debit and credit balance of Profit and Loss account shall be included for the purpose of calculation of Net Worth.
8	Section 2(71)	Definition of Public Company “public company” means a company which— (a) is not a private company; (b) has a minimum paid-up share capital, as may be prescribed: Note:- Words “of five lakh rupees or such higher paid-up capital” omitted by the Companies (Amendment) Act, 2015,  notified on 26th May, 2015, with effect from 29th May 2015.    Provided that a company which is a subsidiary of a company, not being a private company, shall be deemed to be public company for the purposes of this Act even where such subsidiary company continues to be a private company in its articles ;	In sub-clause (a), after the word "company; the word "and" shall be inserted. Effect- It will provide more clarification that a public company must satisfy both the conditions mention in sub section.
9	Section 2(72)	Definition of Public Financial Institutions	According to this Act, CG may notify other institutions which has been established or constituted by or under any central or state act other than Companies Act, 2013/1956 or previous law with the consultation of RBI consider as Public Financial Institutions
10	Section 2(76)	Definition of Related Party Sub clause VIII has been replaced	(viii) any body corporate which is— (A) a holding, subsidiary or an associate company of such company; (B) a subsidiary of a holding company to which it is also a subsidiary; or (C) an investing company or the venturer of the company;" Explanation.—For the purpose of this clause, “the investing company or the venturer of a company” means a body corporate whose investment in the company would result in the company becoming an associate company of the body corporate.
11	Section 2(85)	Definition of Small Company Limit for determination of Small Company has been increased.	Maximum Paid up Sahre Capital has been increased from 5 Crore to 10 Crore Rupees and Turnover increased from 20 Crore to 100 Crore Rs. For the words "as per its last profit and loss account", the words"as per profit and loss account for the immediately preceding financialyear" shall be substituted
12	Section 2(91)	Definition of Turnover “Turnover” means the aggregate value of the realisation of amount made from the sale, supply or distribution of goods or on account of services rendered, or both, by the company during a financial year	"Turnover" means the gross amount of revenue recognised in the profit and loss account from the sale, supply, or distribution of goods or on account of services rendered, or both, by a company during a financial year
13	Section 3A (New Provisions) This provisions was mention in the Companies Act, 1956 but it was not mention in Companies Act, 2013		Members of the Company will severally liable in certain cases. If at any time the number of members of a company is reduced, in the case of a public company, below seven, in the case of a private company, below two, and the company carries on business for more than six months while the number of members is so reduced, every person who is a member of the company during the time that it so carries on business after those six months and is cognisant of the fact that it is carrying on business with less than seven members or two members, as the case may be, shall be severally liable for the payment of the whole debts of the company contracted during that time, and may be severally sued therefor."
14	Amendment of Section 7	INC-9 omitted A Declaration from each of the subscribers to the memorandum and from persons named as the first directors, if any, in the articles that he is not convicted of any offence in connection with the promotion, formation or management of any company, or that he has not been found guilty of any fraud or misfeasance or of any breach of duty to any company under this Act or any previous company law during the preceding five years and that all the documents filed with the Registrar for registration of the company contain information that is correct and complete and true to the best of his knowledge and belief
15	Amendment of section 12	Now A company shall, on and from the 30 Days (instead of 15 D) of its incorporation and at all times thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may be addressed to it. Notice of every change of the situation of the registered office, verified in the manner prescribed, after the date of incorporation of the company, shall be given to the Registrar within 30 Days (instead of 15 D) of the change, who shall record the same
16	Section 21 Authentication of documents, proceedings and contracts	(a) A document or proceeding requiring authentication by a company; or (b) contracts made by or on behalf of a company, may be signed by any key managerial personnel or an "an officer or employee of the company" (Instead of officer only) of the company duly authorised by the Board in this behalf.
17	Section 35. Civil liability for mis-statements in prospectus	Provide relive to Directors, promoters etc. as regards to every misleading statement purported to be made by an expert or contained in what purports to be a copy of or an extract from a report or valuation of an expert, it was a correct and fair representation of the statement, or a correct copy of, or a correct and fair extract from, the report or valuation; and he had reasonable ground to believe and did up to the time of the issue of the prospectus believe, that the person making the statement was competent to make it and that the said person had given the consent required by sub-section (5) of section 26 to the issue of the prospectus and had not withdrawn that consent before delivery of a copy of the prospectus for registration or, to the defendant’s knowledge, before allotment there under.”.
18	Section 47 Voting Right	Whereas a member who is a related party can’t vote on a resolutions which is passed under section 188 of the Act, it is clarify that the right of every member holding equity share to vote on all resolutions placed before the meeting would be subject to subsection 1 of section 188 of the Act.
19	Section 53 Prohibition of Issue of share at Discount.	Ø  the words "discounted price", the word "discount" shall be substituted Ø  a company may issue shares at a discount to its creditors when its debt is converted into shares in pursuance of any statutory resolution plan or debt restructuring scheme in accordance with any guidelines or directions or regulations specified by the Reserve Bank of India under the Reserve Bank of India Act, 1934 or the Banking (Regulation) Act, 1949."
20	Section 62 Further issue of Share Capital	Now letter of offer can be dispatched through courier also.
21	Section 76 A Punishment for contravention of section 73 or section 76 of the Companies Act, 2013	The fine for contravention has been changed to rupees “one crore to one crore rupees or twice the amount of deposit accepted by the company, whichever is lower” Punishment has been changed from seven years or with fine to seven years and with fine. It means offence became Non-Compoundable.
22	Section 100 Calling of an EGM	New proviso has been inserted in sub section 1 of section 100 of the Companies Act, 2013 that is an extraordinary general meeting of the company, other than of the wholly owned subsidiary of a company incorporated outside India, shall be held at a place within India.
23	Section 101 Notice of Meeting	New proviso has been substituted : A general meeting may be called after giving shorter notice than that specified in this sub-section if consent, in writing or by electronic mode, is accorded thereto— (i)                  in the case of an Annual General Meeting, by not less than Ninty-Five percent of the members entitled to vote thereat; and (ii)                in the case of any other general meeting, by members of the company— (a) holding, if the company has a share capital, majority in number of members entitled to vote and who represent not less than ninety-five percent of such part of the paid-up share capital of the company as gives a right to vote at the meeting; or (b) having, if the company has no share capital, not less than Ninty-Five percent of the total voting power exercisable at that meeting: Provided further that where any member of a company is entitled to vote only on some resolution or resolutions to be moved at a meeting and not on the others, those members shall be taken into account for the purposes of this sub-section in respect of the former resolution or resolutions and not in respect of the latter. Note: erstwhile for conducting AGM or EGM at shorter Notice consent of 95 % of members entitled to vote at the meeting was required.
24	Section 110 Postal Ballot	Any item of business required to be transacted by means of postal ballot under clause (a), may be transacted at a general meeting by a company which is required to provide the facility to members to vote by electronic means under section 108. Means: Item which is mandatorily required to transact through Postal Ballot may also transacted through E voting. Item: Rule 22 of the Companies (Management and Administration) Rules, 2014 a.       Alteration of the objects clause of the memorandum and in the case of the company in existence immediately before the commencement of the Act, alteration of the main objects of the memorandum; b.      Alteration of articles of association in relation to insertion or removal of provisions which, under sub-section (68) of section 2, are required to be included in the articles of a company in order to constitute it a private company; c.       Change in place of registered office outside the local limits of any city, town or village as specified in sub-section (5) of section 12; d.      Change in objects for which a company has raised money from public through prospectus and still has any unutilized amount out of the money so raised under sub-section (8) of section 13; e.      Issue of shares with differential rights as to voting or dividend or otherwise under sub-clause (ii) of clause (a) of section 43; f.        Variation in the rights attached to a class of shares or debentures or other securities as specified under section 48; g.       Buy-back of shares by a company under sub-section (1) of section 68; h.      Election of a director under section 151 of the Act; i.         Sale of the whole or substantially the whole of an undertaking of a company as specified under sub-clause (a) of sub-section (1) of section 180; j.        Giving loans or extending guarantee or providing security in excess of the limit specified under sub-section (3) of section 186

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This is 1^st part of Effective provisions of Companies (Amendment) Act, 2017 second and last will publish soon. This is nothing but knowledge sharing initiative of author among the professional and not intend to accost any one in any manner or for any other purpose whatsoever. Whereas deep care has been taken by author to ensure the correctness and completeness of the information provided.

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